Expansion remains on the cards for the semiconductor industry in the long term, both globally and for Singapore, according to the boss of NexGen Wafer Systems. Chief executive Cheung Ting Kwan told The Straits Times that industry growth has been stable over the last decade and even with the slowing economy in the past year, it is forecast to continue its steady climb.

Mr Cheung’s firm – a homegrown enterprise with 53 staff – develops and manufactures semiconductor wafer process equipment. This equipment adds circuitry in a step-by-step process to semiconductor wafers in a wafer fab plant – a specialised factory where raw silicon and other materials are transformed into microchips that run everyday electronic devices.

Mr Cheung said: “For the last two years, our industry funding in China has slowed down for various political and economic reasons.” This is a “big factor” in the decline of overall semiconductor revenue globally. “For our customers outside of China, however, most remain pretty robust. “He added that his Singapore-based company is expecting a number of customers to increase their capital equipment investment next year. “Some will be looking for an increase in production capacity; others will be (going) for the upgrade of existing production lines for newer products and technologies,” he said. Mr Cheung forecasts double-digit revenue growth next year, and for the following three to five years. 

Technological Change 

The consumer electronics industry is in the process of adopting 5G and Internet of Things. Consumer electronics tends to be more up and down in cycles, but when it is up, it drives very high volume very quickly.  “With the slowdown in China and nationalism on the rise, we have seen European, American and Japanese companies putting more investment for manufacturing in their home countries again…” “NexGen has established its footprint in these three areas, and we are in a good position to benefit,” he said.

 

Beginning Of New Technological Cycle

According to World Semiconductor Trade Statistics, the global semiconductor market is expected to grow 5.9 per cent next year after an estimated 12.8 percent decline this year. The call echoes similar predictions by global industry association Semi and consultant International Data Corporation.

The upswing next year is tipped to be the beginning of a new technological cycle. In a recent LinkedIn article, Microsoft president Brad Smith and senior communications director Carol Ann Browne wrote: “We enter a new decade with an increasing capability to rely on machines with computer vision, speech recognition and language translation, all powered by algorithms that recognise patterns within vast quantities of digital data stored in the cloud.”

The 2020s will likely see new developments that will further transform the use of technology around the world, including the increasing use of quantum computing, digital data storage in the cloud and advanced connectivity through expansion of the 5G network, further empowering the Internet of Things and AI. The wave of these new technologies presents an inflection point for Singapore’s semiconductor industry. The wave of new technologies presents an inflection point for Singapore’s semiconductor industry in 2020. The sector contributes about 7 per cent to 8 per cent to the annual gross domestic product and supports around 35 per cent of the manufacturing workforce.

Mr Chok Yean Hung, group chief executive officer at Singapore-listed AEM Holdings, said that even though infrastructure, workforce skills and productivity will continue to be critical to competitiveness in the years ahead, low-cost labour alone will not be enough. “With a good pool of talents as a backbone, we should see Singapore’s semiconductor industry evolving from labour-intensive value-add to technology-driven value-add with the heightening of automation and data centric engineering riding on Industry 4.0,” he said.

Mr Ang Wee Seng, executive director of Singapore Semiconductor Industry Association, said companies need to prepare for the demand spike. “One way to address this surge is to ensure higher productivity in manufacturing lines, and this could be done by starting to implement productivity projects now, pushing for better automation, and ensuring the workforce is ready too,” he said.

SOURCE OF CONTENTS: 

Straits Times

Sue- Ann Tan Optimism in semiconductor sector (DEC 27, 2019) https://www.straitstimes.com/business/economy/optimism-in-semiconductorsector

Sue- Ann Tan, Ovais Subhani Factory output drops in Nov amid low demand (DEC 27, 2019) https://www.straitstimes.com/business/economy/factory-output-drops-in-novamid-low-demand